Even if you don’t believe real-time feeds will become the dominant content consumption paradigm, it’s clear they’re a growing force. Consumer-paid access to real-time feeds is largely constrained to paid mobile apps today, so advertising would appear to be the immediate payoff. With that in mind, let’s look at how social media companies can best cash in.

I haven’t come across a forecast for real-time advertising spending, but it’s a nascent market that’s fairly concentrated: Facebook and Twitter represent the largest audiences. Market researcher eMarketer projects Facebook will collect $1.3 billion in ad revenues globally in 2010; presumably, most of that will be spent on Facebook’s news feed. Twitter is only just beginning to embrace advertising. But clearly, we’re talking about a business that will be measured in billions rather than millions of dollars.

The current audience concentration — and the resulting ad dollars — could diffuse. Already, a lot of tweets get viewed on third-party Twitter clients, as well as on Facebook. Somewhat similarly, Facebook is syndicating its content through initiatives like Facebook Connect and Instant Personalization, as well as arrangements that allow companies like Skype to show Facebook users’ updates and presence within its own application. So it might not be just Facebook and Twitter who can cash in on those audiences.

Could Real-Time Ad Networks Jump-Start Spending?

Advertisers demand a certain scale of audience before they start spending big money. As with other media — social or otherwise — ad networks can alleviate audience fragmentation, giving advertisers access to eyeballs across a number of sites or apps. The big ad networks from AOL, Google, Microsoft or Yahoo aren’t doing anything in the real-time space. Meanwhile, a handful of startups have emerged. That includes 140 Proof and OneRiot, who sell inventory on Twitter clients and apps, as well as Tweetup, which also makes its own destination site. Ad.ly will construct celebrity-sponsored updates and insert them in Twitter and Facebook streams.

I spent some time with OneRiot this week; its experiences are good indicators of the state of the real-time ad marketplace:

Tapping test budgets. OneRiot’s business is divided evenly between publishers (New York Times, ESPN, Guardian) who are promoting its stories or marketing their apps in feeds and more traditional marketers like Zappos and Stella Artois. OneRiot is getting part of the test budget of bigger campaigns, so advertisers are only spending tens of thousands of dollars with it. The company can charge 12 to 25 cents for click-throughs, or $2 to $3 CPMs.

Relatively simple targeting. OneRiot usually sells an audience type rather than target by demographic or content context. Its analysis shows that Twitter client users are a highly engaged audience; when they click through to a story or site, they’re likely to hang around twice as long, generating 7 or 8 pageviews.

Ad format experiments. OneRiot serves up text ads that look like search engine marketing, but its architecture can handle banners and richer formats. It says some advertisers have experimented with dynamic content that is contextually related and inserted into the text creative.

Ad Network Realities

Right now, the ad networks in real-time are ahead of most of the feed sites in sophistication, and could help move the market forward. But in most media markets, it’s the company with the eyeballs that commands the vast majority of ad spending. Not long ago, observers who probably over-interpreted Google’s success thought online ad networks could reverse this. But that hasn’t turned out to be the case.

Publishers and other content companies like to hold onto the best ad inventory and sell it directly to their best advertisers and ad agency clients. That leaves low-priced remnant inventory for the networks. NBC dropped Google’s TV ad network recently; Microsoft is shutting down its in-game ad network because its biggest customer, Electronic Arts, pulled the business in-house.